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Council Tax exemptions on vacant new build property
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# 1
TMW
Old 21-05-2009, 11:45 AM
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Default Council Tax exemptions on vacant new build property

Hi All

I work for a small developer in the Leeds area and we are currently in the procecss of building out our development and therefore have a number of vacant new build properties, which we are currently marketting.

Leeds City Council explained that we were eligible for a 6 month council tax exemption period on each property, however now this period has lapsed, we are now liable for the full 100% council tax on each unit.

This equates to a significant sum of money each month, whilst we find buyers for each unit and this is likely to remain the case for several months.

Does anyone have any experience within this field and would this be the case for all developers, as some of the larger ones such as Barratt etc must be paying several thousand each month on council tax on their vacant completed units, whilst they find buyers.

Surely there must be some form of discount or exemption that would apply.......especially in these difficult times where it may take several months to sell the properties.

Any advice would be much appreciated and if someone knows where the specific Government policy and guidance is on this matter, then that would also be useful.

Thanks in advance
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kforshaw
Old 21-05-2009, 12:47 PM
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Unfortunately, legislation changed last year so the exemption/discount is reduced to 0% after 6 months.
I know of a number of large cheques that come through our cash office each month from builders who haven't yet sold their properties.

So, you aren't the first and you won't be the last in the same situation.
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lincroft1710
Old 21-05-2009, 5:24 PM
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TMW - would it not be an idea to reduce price of houses to get them sold.
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# 4
CIS
Old 21-05-2009, 5:48 PM
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Quote:
Unfortunately, legislation changed last year so the exemption/discount is reduced to 0% after 6 months.
I know of a number of large cheques that come through our cash office each month from builders who haven't yet sold their properties.
The legislation didn't change last year, the actual powers to vary the charge came in to force on 01 April 2004 however most council's did not implement the change immediately.

The actual powers allow the local authority to vary the charge on an un-occupied/un-furnished property to between 50% and 0% discount at their discretion.

The council are right (I work in council tax) and unfortunately after the 6 month exemption the charge reverts to the locally determined rate. I suspect the large companies delay the completion to a point where the completion note isn't served for as long as possible (we dont bill many large developers) and thus they aren't in the valuation list.
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lincroft1710
Old 22-05-2009, 6:55 PM
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CIS - in the past I've known councils serve completion notices on uncompleted buildings just to get them into the Valuation List. Often developer would forget about 28 day objection period and dwelling went into VL. Do you know if this still happens?
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CIS
Old 22-05-2009, 7:27 PM
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That wouldn't surprise me at all.

Don't really see it in our area - it may happen more on the non-domestic side - but I believe our completion notices are served by building control so they handle any arguments that may happen.
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